Filing an insurance claim can be a complex and tedious process depending on the type of insurance policy, claim, and scope of property damages. For insured property owners who incur damage to their property, and especially those who enter into disputes with their insurance company upon filing a property damage claim, it is important to consider and understand appraisal and the appraisal process.

Suppose you have sustained damage to your commercial or residential property in the form of water damage, mold damage, storm or hurricane damage, fire damage, structural damage, cast iron pipe failure, or damage due to environmental disaster. Suppose that your lawyer estimated the damage to be $100,000.00 and your insurance company has estimated the same damages to be $20,000.00. In that case, you may have the right and option to invoke the appraisal clause and appoint an appraiser to help settle any dispute that may arise between you and the insurance company.

But what does an appraisal mean, and how does it work to ensure that you, as a property owner, receive the fair settlement that you are entitled to?

What Is an Appraisal Clause?

It is not uncommon for a disagreement to arise between the insurer and the insured, especially regarding the scope of property damages or the amount of loss. In the event that the insurer acts in bad faith and refuses to negotiate and pay you a dollar amount needed to repair or replace your damage, you may have the right to invoke an appraisal clause that is in your property insurance policy.

An appraisal clause is invoked when the insured and insurer cannot come to an agreement regarding the amount of money the insurer should pay to settle the insurance claim. This stalemate might occur because there is a dispute over the specific price and cost to make a repair. Or the dispute may arise over the scope of the damages. A common example would be for a wind or storm damaged roof and whether the roof can be repaired or will need to be replaced in its entirety.

Alternatively, it may come about following a disagreement regarding what constitutes materials of like or similar quality to return the damaged property to its pre-loss condition. Going back to the roof example, a question may arise whether or not a discontinued roof tile can be matched with roof tiles that are currently being produced. In either case, the insured may avail the appraisal process to settle the dispute in a non-judicial manner.

How Does an Insurance Appraisal Work?

According to the appraisal clause, an appraisal is essentially a non-judicial way of resolving a dispute between the insurer and the insured. Appraisals are different than mediation for in appraisal both sides – the insured and the insurance company, will each appoint an impartial, competent, and experienced appraiser. These two appraisers will then choose a third-party moderator, known as an umpire.

Each appraiser will then negotiate with one another and eventually file separate reports of the amount of loss. If they can come to an agreement, the amount agreed upon will be the settlement. If they cannot agree, they will submit their differences to the umpire who will then arrive at a settlement decision. Any two parties from the three people e.g. the Appraiser for the carrier, Appraiser for the insured and the Umpire creates a binding agreement.

As you can see, an insurance appraisal is a contractual process that the insured can avail to settle valuation-based disputes with the insurance company. Notably, coverage-based issues cannot be settled via an appraisal.

Importantly, before invoking an appraisal clause, the insurer and insured must first make a genuine attempt at negotiating the scope of damages. Moreover, the insurance appraiser that is hired must be an unbiased and competent professional whose job is to evaluate the claim and the scope of damages. Accordingly, an appraiser can be an adjuster, engineer, contractor or even a lawyer. Similarly, the umpire must be someone who is able to provide an unbiased valuation based on the facts and their expertise.

Consumer Law Office – Handling Property Insurance Disputes From Start to Settlement

If electing appraisal, it is best for an experienced property damage attorney , like the team  at the Consumer law Office, represent you, since they are trained and experienced in appraisals and in understanding the details of your insurance policy, and are thus best equipped to maximize the value of your claim. If you have sustained damages to your property and are in a valuation dispute with your insurance company, highly experienced, knowledgeable  and assertive  Property Damage Attorneys at Consumer Law Office are here to review your insurance claim and help you receive the compensation you deserve under your policy.

If your insurance company is acting in bad faith, either by refusing to negotiate a valuation settlement, or pushing you to accept a lower scope of damages than is true, Consumer Law Office’s attorneys can help you through the appraisal process, and in the case of further disagreement, are ready to take the insurance company to court to expose them for potential punitive damages.

Consumer law Office is a client-centric law firm that is committed to delivering excellent customer service. Our Property Damage Attorneys fight aggressively on behalf of residential and commercial policyholders, contractors, mitigation companies, and public adjusters to produce maximum recovery results through the firm’s deep understanding of insurance law, cutting-edge technology, and proactive approach to litigation.

For more information, contact Consumer law Office or call at our telephone: 305-940-0924